Building permits surge

Value of non-residential starts rises in July after a dismal June,

The value of building permits issued to construction firms surged back in July after a lacklustre June.

According to Statistics Canada (StatsCan) the City of Ottawa issued building permits for construction projects worth $235.2 million during the month, a 30.7 per cent increase over the $179.9 million worth of permits issued in June.

June saw an uncharacteristic drop in the value of building permits obtained, falling 20.6 per cent from May.

Leading the July numbers was a sharp increase in non-residential permit values, which rose to $187.2 million during the month, a 192.2 per cent increase over the $64 million recorded in June.

The pace of residential construction continued to slow during the month as buyers have scaled back their purchasing intentions. Builders acquired $47.96 million worth of permits, a 58.6 per cent drop from the $115.8 million acquired in June.

Year-to-date, the pace of construction by Ottawa builders is slightly ahead of 2012.

According to StatsCan, Ottawa builders applied for $1.29 billion worth of permits, a 2.3 per cent increase over the $1.26 billion in permits the builders sought in the first seven months of 2012.

Permit values are used as a key indicator of future building intentions within the city limits, but big swings in Ottawa in recent months have hampered any assessment of the strength of the local construction industry.

In Gatineau, permit values also soared following a long drought. StatsCan said the value of permits sought by builders hit $57 million in July, a 174.3 per cent increase over the $20.7 million recorded in June.

Nationally, building permits rose to a record in July as the value of projects such as shopping malls and office buildings almost doubled. The value of municipal permits rose 20.7 per cent to $7.99 billion, StatsCan said.

Permits for non-residential construction rose 45.5 per cent to a record $3.86 billion, including an 89.2 per cent jump in commercial building to $2.56 billion.

The Canadian dollar rose after the report seemed to signal that domestic demand remained strong and continued to lead the world’s 11th-largest economy as exports faltered. StatsCan also reported fasterthan-expected job growth last week, and said on Aug. 30 that consumption led output growth during the second quarter.

“It’s a good sign for the economy” and may add to growth in July, said Benjamin Reitzes, a senior economist at BMO Capital Markets in Toronto. The gains in commercial permits still aren’t sustainable,” he said.